Residents of Patna and other urban areas in the state would no longer have to face the brunt of annual hike in property prices.
The state registration department through a recent amendment in the Bihar Stamp (Prevention of Under Valuation of Instruments) Rules, 1995, has ended the process of annual revision of Minimum Value Register (MVR) rates for land in urban and semi-urban areas. The amendment also states that the MVR revision in agricultural areas would now be done after every three years.
MVR is the base rate for fixing stamp duty of a property in a particular location.
The revision of MVR rates in urban areas would now be done only upon nod from the state cabinet. Till now, the district collector, who is the district magistrate, was supposed to prepare a register showing the estimated minimum value of the land/properties on annual basis, which was to be approved by the registration department.
The immediate benefit of the amendment would be enjoyed by prospective property buyers in Patna. The district registration office, in the first week of March, came up with the revised MVR rates for the ongoing fiscal (2014-15). The list of proposed rates was also put up on the website of the Patna district administration for seeking feedback from residents.
However, the entire process was put on hold due to the model code of conduct imposed during the Lok Sabha elections. Later, the registration department made the proposal to end the annual revision in MVR and got a nod on it from the state cabinet as well.
Manibhushan Prasad, assistant inspector-general of registration said on Friday: “We received the approved amendments in the rules related to revision of MVR (Bihar Stamp Rules, 1995) from the state cabinet only two days ago. In pursuance of the amendment, the proposed revision in the MVR in the Patna district would not be implemented.”
The last revision in MVR was made effective by the state registration department on May 15 last year. The hike in the MVR rates in several localities in Patna was revised upwards by 300 per cent.
Sources claimed that the reason behind annual revision in the MVR rates was to minimise the gap between the government rate of land and the market rate, thus keeping a tab on corruption in registration and black marketing.
Developers in the city have welcomed the decision. “The amendment is a positive step taken by the registration department and it would augment growth in the real estate sector. The annual revision in MVR rates is feasible only when there is symmetrical growth in the real estate sector as well but that does not happen every year. Moreover, lower MVR rates would also lead to increased revenue for the state government,” said Sachin Chandra, state chairman, Bihar chapter, Builders Association of India.
Deliberating about the perils of annual revision of MVR, Chandra said: “If the MVR, which is the government rate of land, is higher than the market rate, then both the buyer and seller are required to pay income tax on the difference amount. This becomes a case of double taxation and extra financial burden on both parties.”